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New Paper Models a Minimum Wage Increase

Posted on May 19, 2016 by Micheál Collins

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The establishment of a Low Pay Commission in the Republic of Ireland and the renewed focus on low pay and a ‘living wage’ both in Ireland and the UK has revived a growing interest in policies that focus on providing adequate minimum levels of pay for all employees.

A new NERI research paper from Niamh Holton and Micheál Collins models the impact of an increase in the minimum wage to a level equal to two-thirds of median hourly earnings by 2020, a value equivalent to Eurostat’s definition of the Low Pay threshold.

The modelled increase would bring the minimum wage to a level of €12.50 per hour in that year, an increase of 36.6% between 2016 and 2020. In the context of previous changes to the Irish wage floor, the increase is equivalent to the change between October 2002 and July 2007 (+36.2%).

The paper finds that the modelled increase would raise the hourly earnings for almost one-third of the lowest paid employees and reduce the level of inequity in the wage distribution.

The paper is available here.

Slides from an NERI seminar, where this research was presented (18th May) are below:

Posted in: GenderInequalityJobsLabour costsWages

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